Apple Inc. (NASDAQ: AAPL) already received one analyst upgrade for 2015, and now we are seeing another upgrade on Tuesday. Credit Suisse’s Patrick Jobin raised Apple to an Outperform rating from Neutral, and raised its target price to $130 from $110. We also saw an increased outlook from the analyst at Canaccord Genuity based on higher iPhone sales.

What may stand out the most here is that Credit Suisse also raised its earnings per share estimates by 18% and 20% to $9.44 and $10.06, respectively, for this year and the next. This is assuming a solid and sustainable iPhone volume base, sizable increase in scope for cash return and earnings per share momentum. Credit Suisse sees $10 earnings per share power in the 2016 calendar year which in turn will drive earnings momentum and rationalize the upgrade to at least $130.

Credit Suisse estimates that iPhone gross product can grow by 42%, or $18 billion, over 2015. For iPhone gross margins, the firm estimates that Apple will have 43.5% in fiscal year 2015 and 42.6% in fiscal year 2016. This is achieved through two positive drivers. First, a material mix shift is coming into play, which is estimated to lead to 64GB models to account for 52% of total volumes in fiscal year 2015. Second, the iPhone 6 Plus could make up at least 21% of total unit mix in fiscal year 2015 while driving a gross margin accretive component.

Based on excessive net cash levels, the firm believes that a $200 billion cash return program is due. Since the inception of Apple, it has regularly increased its cash distribution target, considering strong free cash flow and excessive levels of cash. Given that Apple’s free cash flow is currently a sustainable $50 billion per year, there is scope to increase the cash return program to $200 billion and extend it an additional three years.

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Credit Suisse makes some assumptions and sees positive leverage for upside:

• With gross margins at 40% at the corporate level, the firm’s projections could be conservative when it shows no leverage despite increased sales, as well as scope for expansion as cost curves on new products improve.
• Assuming only 20 million Apple Watches will be sold at an average sale price of $400 in the 2015 calendar year, with a gross margin of 50%.
• There will be no significant impact from new products or monetization of services.

Canaccord Genuity analyst Michael Walkley commented on Apple’s current position as well:

Our surveys indicated the iPhone 6/ 6 Plus smartphones were by far the top selling smartphones at all four tier-1 U.S carriers. … The surveys indicated strong demand and high-tier market share gains for the iPhone 6/6 Plus smartphones. … With our surveys, supply chain analysis, and conversations with distributors indicating Apple gained material high-end smartphone share, we raise our Q1/F’15 iPhone shipment estimate from 65M to 68M units

The stock has a consensus analyst price target of $122.12, which implies upside of 11.8%, compared to Credit Suisse’s price target of $130.00, implying upside of 19%, from Monday’s closing price. The highest analyst price target is $150.00, which projects that Apple has upside of 37.3%.

Late Tuesday morning, shares of Apple were up about 2.7% at $112.26. The 52-week trading range is $70.51 to $119.75.

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